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DECISION No

DECISION No.37/2000/QD-TTg OF MARCH 24, 2000 PROMULGATING THE POLICY OF ASSISTANCE TO THE DEVELOPMENT OF KEY INDUSTRIAL PRODUCTS (APPLICABLE TO OCEAN-GOING SHIPS OF 11,500 TONS, INTERNAL COMBUSTION ENGINES UNDER 30 HP AND COLOR TV SETS)

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of September 30,1992;

At the proposal of the Minister of Industry, the Minister of Planning and Investment and the Minister of Finance;

In order to create conditions for the development of a number of key industries,

DECIDES:

Article 1.- To promulgate together with this Decision the Policy of assistance to the development of key industrial products.

Article 2.- The policy of assistance to the development of key industrial products is applicable to 3 products: ocean-going ships of 11,500 tons (Appendix 1), small-sized internal combustion engines under 30 HP (Appendix 2) and color TV sets (Appendix 3). Besides the enterprises assigned with the prime responsibility in implementing the project of key industrial products, the enterprises assigned to coordinate with one another and participate in producing the above products (as certified by the Ministry of Industry) shall also enjoy the priorities and assistance specified in this Decision.

Article 3.- The Ministry of Planning and Investment, the Ministry of Industry and the Ministry of Science, Technology and Environment are assigned to coordinate with the related agencies in studying to continue adding other products to the list of key industrial products.

Article 4.- The Prime Minister assigns:

a/ The Ministry of Industry to assume the prime responsibility and together with the Ministry of Science, Technology and Environment coordinate with the related agencies to study and issue regulations to guide the necessary contents and process so that the enterprises may have the basis to draw up their plans of implementation and achieve the criteria required for the products at the national standard.

b/ The Ministry of Finance and the General Customs Department to direct their dependent units to coordinate with the enterprises in listing the items of goods exempted from import tax in conformity with the policy of assistance mentioned in Appendixes 1, 2 and 3 of this Decision.

c/ The Vietnam State Bank and the Development Investment Assistance Fund to issue a regulation guiding the contents and process of evaluation of the capital borrowing and repayment plans of the projects of producing key industrial products already approved.

The tasks set in Points a, b and c shall have to be completed before April 30, 2000.

Article 5.- This Decision takes effect 15 days after its signing.

Article 6.- The Minister of Industry, the Minister of Planning and Investment, the Minister of Finance, the Minister of Communications and Transport, the Minister of Trade, the Minister of Defense, the Minister of Agriculture and Rural Development, the Minister of Construction, the Minister of Aquatic Resources, the Governor of the Vietnam State Bank, the General Director of Land Administration, the General Director of Customs, the General Director of Post and Telecommunications, the Head of the Government Pricing Committee, the President of the People�s Committee of Hanoi, the President of the Management Board of the Development Investment Assistance Fund, the General Director of the Corporation of Shipbuilding Industry, the General Director of the Motors and Agricultural Machines Corporation, the Director of the Hanoi Electronics Company, and the heads of the relevant agencies shall have to implement this Decision.

For the Prime Minister

Deputy Prime Minister
NGUYEN TAN DUNG

APPENDIX I

POLICY OF ASSISTANCE TO THE DEVELOPMENT OF KEY INDUSTRIAL PRODUCTS APPLICABLE TO OCEAN-GOING SHIPS OF 11,500 TONS

(issued together with Decision No. 37/2000/QD-TTg of March 24, 2000 of the Prime Minister)

I. Enterprise with prime responsiblity for deploying the implementation of the project:

The Vietnam Shipbuilding Corporation

II. Assistance policy:

1. On taxation:

- Exemption from import tax up to the end of December 31, 2003 for the specialized equipment, machinery and transport means in the technological lines to create fixed assets of the enterprise and materials which need to be imported but cannot yet be produced in the country for the building of ships of 11,500 tons.

- Incomes from the building of 11,500-ton ships of the enterprise in execution of the project shall enjoy the enterprise income tax rate of 25%, are exempt from tax in the first two years after generating taxable incomes, and enjoy a 50% reduction of the payable income tax for the two subsequent years.

2. On capital for the enterprise:

- When the need arises to invest in building production establishments, the enterprise can borrow the State�s development investment credits from the Development Assistance Fund for a maximum period of no more than 10 years for each separate loan. The capital borrowing enterprise shall not have to mortgage its assets, but is not entitled to assign its assets before it has repaid all its debts (principal and interest) for each loan.

- Allocation of the full 30% of the working capital under norm for building the 11,500-ton ship to the enterprise directly producing it, the shortfall in working capital shall be covered with the State�s development investment credit from the Development Assistance Fund corresponding with a production cycle under the projects approved every two years, including the capital for the import of machinery, equipment and materials.

- Enterprises using domestically built 11,500-ton ships, when necessary may borrow the State�s development investment credit capital from the Development Assistance Fund at a maximum rate of no more than 85% of the purchase value of the ship and for a loan period of no more than 10 years.

- Assistance from State budget fund reserved for scientific and technical research in development research projects after the project is approved.

3. Other priorities:

50% reduction of land rent for the enterprise during the period of implementation of the project.

III. Protection measures:

When the need arises to buy equipment for this type of ship, the State enterprises, regardless of the sources of capital used, must report and ask for permission from the Prime Minister. Units building 11,500-ton ships shall be given priority consideration in the bids to supply ships to the fleets of the Vietnam Maritime Corporation, the Petrol and Oil Import-Export Corporation, the Vietnam Petroleum Corporation, the Vietnam Coal Corporation, the Vietnam Cement Corporation and other shipping organizations.

APPENDIX 2

POLICY OF ASSISTANCE TO DEVELOPMENT TO KEY INDUSTRIAL PRODUCTS APPLIED TO SMALL-SIZED INTERNAL COMBUSTION ENGINES OF UNDER 30 HP

(issued together with Decision No. 37/2000/QD-TTg of March 24, 2000 of the Prime Minister)

I. Enterprise with prime responsibility for deployment of implementation of the project:

The Vietnam Motors and Agricultural Machines Corporation.

II. Policy of assistance:

1. On taxation:

- Exemption of import tax up to the end of December 31, 2003 for specialized equipment, machinery and transport means in the technological lines to create the fixed assets of the enterprise and the materials that need to be imported but cannot yet be produced in the country.

- Incomes from activities to produce small-sized internal combustion engines under 30 HP of the project implementing enterprise shall enjoy the income tax rate of 25%, are exempt from tax in the first two years after taxable income is generated and enjoy a 50% reduction of the payable income tax for the two subsequent years.

2. On capital for the enterprise:

- When the need arises for investment in building production establishments, the enterprise may borrow the State�s development investment credits from the Development Assistance Fund, for a maximum period of no more than 10 years for each separate loan. The borrowing enterprise does not have to mortgage its properties but cannot assign its properties before paying all the debts (principal and interest) for each loan.

- The enterprise shall be allocated fully the 30% of the working capital under norm, the shortfall in working capital of the enterprise directly producing this product shall be covered by the State�s development investment credits from the Development Assistance Fund corresponding with a cycle of production of the product.

- The enterprise shall be assisted by the State budgetary fund reserved for scientific and technical research in development projects after the project is approved.

3. Other priorities:

Reduction by 50% of land rent during the period of implementation of the project.

APPENDIX 3

POLICY OF ASSISTANCE TO DEVELOPMENT OF KEY INDUSTRIAL PRODUCTS APPLICABLE TO COLOR TELEVISION SETS

(issued together with Decision No. 37/2000/QD-TTg of March 24, 2000 of the Prime Minister)

I. Enterprise with prime responbility for deployment of implementation of the project:

The Hanoi Electronics Company

II. Assistance policy:

1. On taxation:

- Exemption of import tax up to the end of December 31, 2003 for the specialized equipment, machinery and transport means in the technology lines to create the fixed assets of the enterprise.

-The income from activities to produce color television sets of the project implementing enterprise shall enjoy the income tax rate of 25%, is exempt from tax in the first two years after taxable income is generated and a 50% reduction of the payable taxable income tax for the two subsequent years.

- Eligible for preferential index with 0.5% readjustment coefficient in the calculation of import tax for the localization rate stipulated in the Joint Circular No. 176/1998/TTLT of December 25, 1998 of the Ministry of Finance, the Ministry of Industry and the General Department of Customs.

2. On capital for the enterprise:

- When the need arises to invest in building production establishments, the enterprise is eligible for the State�s development investment credit loans from the Development Assistance Fund, the maximum loaning period not exceeding 10 years for each separate loan. The borrowing enterprise shall not have to mortgage its assets but cannot assign its properties before paying up all the debts (principal and interest) for each loan.

- Allocation of the full 30% of working capital under norm for the enterprise directly producing color television sets, the shortfall in working capital shall be covered by the State�s development investment credits from the Development Assistance Fund corresponding with a production cycle of the product.

- Assistance of the State budgetary fund to scientific and technical research in projects of development research after the project is approved.

3. Other priorities:

Reduction by 50% of land rent during the period of implementation of the project.-